Bolsonaro has launched a pension reform to save $ 300 million

President Jair Bolsonaro presented to Congress on Wednesday the plan to reform the pension system, considered essential for Brazil's financial equilibrium and to maintain the credibility of its ultraconservative government after a chaotic start.

With the proposal, that sets a minimum age of 62 for women and 65 for men, the government plans to save R $ 1.16 trillion (more than $ 300,000 million) over the next decade, according to a document communicated by the Ministry of Economy.

The project also establishes that Brazilians must contribute for at least 40 years with the pension system to retire full board.

Brazil is one of the few countries not to set a minimum age for retirement. The current system allows women who have been in retirement for 30 years and men who have been doing so for 35 years, with no minimum age, although benefits are better for those who are working longer.

The architect of the reform is the Minister of Economy, Paulo Guedes, an ultra-liberal educated at the Chicago School. His support for Bolsonaro has strongly supported the markets with the ex-captain of the army.

Bolsonaro and Guedes arrived at Congress in the morning to hand over the project to the President of Deputies, Rodrigo Maia, in the middle of a small demonstration of opposition MPs., who booed the leaders of the executive and the legislature. Bolsonaro is expected to address the nation at night.

The president of the far right warned this week that, Without a new pension plan, "Brazil will fail in 2022 or 2023". The warning may seem exaggerated, but even opposition sectors admit that a reform is needed in an aging country.

In 2018, 9.2% of the 209 million Brazilians were over 65 years old. In 2060, they will be 25.5%, according to official forecasts.

About 1,000 people demonstrated in the morning against the project in downtown Sao Paulo, organized by the main unions of the country, which denounces an attempt to "end the social security in Brazil."

"One of the problems in Brazil (…), is that there are people who retire with a little over 50 years and even less in certain categories, such as police officers and teachers "said economist Marcel Balbadiano of the Getúlio Vargas Foundation (FGV).

The prospect of a tougher retirement has led many people to apply for early retirement in recent years. That's what Silvia Oliveira intends to do, a 50-year-old Rio de Janeiro secretary.

"I I already quote for 30 years [el tiempo exigible para la jubilación de una mujer]but I do not have the minimum age desired by the government. So I'm going to see if I can retire, because I'm afraid of having to work twelve more years. "he explains.

Other worries come from the fact that the greatest efforts are required of the categories most affected by unemployment, who will hardly be able to cope with their years of contribution.

Pension expenditures accounted for 13.64 percent of Brazil's GDP in 2017 and, without corrections, could reach 23 percent in 2060.

The aging trend has been accentuated by the 2014-15 recession and weak growth: The retirement deficit (public and private sectors), which accounted for 2.1% of GDP in 2011, reached 4.25% in 2018.

The UK consultancy Capital Economics has pointed out that indications point to an "ambitious reform that would (…) stabilize the public debt-to-GDP ratio" around its current level of nearly 80%.

But he warned that "historically" this issue has sparked a lot of rejection in Congress and that it is feared that efforts to advance this reform "arouse the appetite" to pick from others. challenges that will bring the country back to growth.

Bolsonaro has in principle a majority consisting of multi-party seats to approve this constitutional reform, which requires a three-fifths majority of seats. in the Chamber of Deputies (308 out of a total of 513) as in the Senate (49 out of 61).

Vice President Hamilton Mourao said on Tuesday that the government currently has 250 votes in the House and that it would take "60 or 70 to approve the proposal."

But the impetus with which the president came to power on Jan. 1 was affected by accusations of dissent and corruption, which culminated on Monday with the dismissal of a prominent minister.